62-1 Shin’e, Yokone-machi, Obu-shi, Aichi, 474-0011 TEL: 0562-45-2700 FAX: 0562-45-2702 https://www.sugi-hd.co.jp/
The history of the SUGI Pharmacy Group began in 1976 from just a 16-tsubo pharmacy in Nishio, Aichi.
(1 tsubo = approx. 3.3 m2.) Supported since then by local customers for whom we serve as an operator of
“family drugstores,” we now run approximately 1,300 stores mainly in the Kanto, Chubu, Kansai and
Hokuriku regions.
In addition, we have evolved into an operator of community-healthcare drugstores where not only
prescription dispensing services but also home healthcare services are available. By assigning highly-
specialized human resources, such as pharmacists, beauty advisers and nationally certified dietitians,
we live up to the trust placed in us by local customers mainly through counseling services.
In this age of the super-aging society, we promote the lifetime wellness of local residents in fields
ranging from primary prevention and secondary prevention, to medical treatment, elderly nursing care
and terminal care.
Drugstore operation
SUGI Pharmacy Group
Home-visit nursing and elderly home-care support
Promotion of disabled employment
Editorial Policy
This report has been edited for the purpose of presenting the SUGI Pharmacy Group’s business philosophy and attitude toward sustainability, and providing stakeholders with easy-to-understand explanations on our activities that are carried out based on this philosophy and attitude, and their results. The report contains data and articles regarding our corporate activities that we deem especially important.
ContentsCorporate Philosophy � � � � � � � � � � � � � � � � � � � � � 2Management Messages � � � � � � � � � � � � � � � � � � � 4
Feature Article— Strategy Explained by Vice President � � � � � � � 6
The Growth of the SUGI Pharmacy Group � � � � � � 8SUGI Pharmacy Group Today � � � � � � � � � � � � � � � 10Value Creation Process � � � � � � � � � � � � � � � � � � � � 12Mid-Term Management Plan 2022 � � � � � � � � � � � 16
Sustainability & Priority Issues � � � � � � � � � � � � 18Corporate Governance � � � � � � � � � � � � � � � � � � 30Data Section � � � � � � � � � � � � � � � � � � � � � � � � � � 36
Profile
The SUGI Pharmacy Group strives to contribute to
local communities by underpinning customers’ healthy,
rich lifestyles and community healthcare.
SUGI Smile
1Sugi Holdings Report 2020
Corporate Philosophy
The SUGI Pharmacy Group will remain a “pharmacy.”This is the pride of the corporate group and
the pride of all employees.Since our founding, we have aimed to contribute to local communities by selling medical and pharma-
ceutical products, health foods, cosmetics and daily items, and by dispensing prescriptions. Today, even
after we developed into an operator of a chain of approximately 1,300 drugstores with approximately
28,000 employees, we are proud that we will remain a “pharmacy.” We are working to further enhance
our corporate value and accomplish sustainable growth of local communities.
Highly acclaimed for its sincere and kind treatment of customers, each of whom was served attentively
through its counseling service, our first store thrived as a kind “family pharmacy.” Since then, we have
adopted the corporate watchwords of “kindness, honesty and trust” as the principles guiding us to growth.
A layer of “kindness” forms “honesty” and leads to the establishment of “trust.” These tenets presented
in our corporate watchwords, together with an altruistic spirit, or “sincerity,” are reflected in our manage-
ment philosophy showing our fundamental values. They have been anchored among all members of our
corporate group and put into practice.
Action with “sincerity” based on the tenets of our corporate watchwords and management philosophy with
their focal point on “kindness,” which has been the unchanging focus since our establishment, reinforces
our business and HR foundation, helps customers smile, and makes them pleased and moved. This leads to
the happiness of employees and the growth of the SUGI Pharmacy Group loved by local communities.
(At the time of the establishment of the company)
Closer to you and more reliable for youServing as the source of your smile
We strive to become a close, handy, and reliable partner underpinning the health, hygiene, comfort,
and security of local communities.
We will continue to make decisions and take action from the perspective of customers.
We will continue to pursue innovation in anticipation of changes both inside and outside our company.
We will continue to expand and deepen our capabilities and grow together with our company.
We will continue to be honest.
We will continue to respect diversity.
We help many more people smile,Hoping for the happiness of each employee,
Hoping for the happiness of each customer, andHoping for the happiness of everybody
We contribute to local communities through our sincere, kind services.
Vision
Our Pledge
Management Philosophy
Corporate Watchwords
KindnessServe customers with sincerity and kindness.
HonestyWork with business partners with humility and honesty.
TrustBe trusted by both customers and business partners.
Management Philosophy
<For Society>Strive to create a corporate framework enabling us to contribute to local communities by selling medical and pharmaceutical products, health foods, cosmetics and daily items, and by dispensing prescriptions.
<For Employees>Strive to create a corporate framework enabling the company to grow together with employees with the aim of ensuring their happiness.
2 3Sugi Holdings Report 2020 Sugi Holdings Report 2020
Management Messages
As a pharmacist, I established SUGI Pharmacy in 1976 in Nishio, Aichi, to
provide pharmaceutical support for local residents to enjoy healthy life-
styles and contribute to the local community.
In the SUGI Pharmacy Group, we uphold the corporate watchwords of
“kindness, honesty and trust,” which have been passed down for 44 years
since our establishment. “Kindness” serves as the starting point of the ties
formed between all of our stakeholders—including customers and employ-
ees—through their smiles, and if such smiles spread among many more
people, the ties will further expand. By ensuring this process, we are aiming
to contribute to the sustainable growth of local communities from the
perspective of an operator of community-oriented, kind, family drugstores.
Our corporate group’s business model was greatly affected by the U.S.
inspection tour that we made right after our founding. As the first pre-
scription dispensing drugstore in Japan, we have been focusing on
highly-specialized counseling services and prescription dispensing ser-
vices. We have laid our present foundation by providing counseling ser-
vices well-tuned to each customer and implementing strategies properly
based on the needs of today’s super-aging society and the needs of
health-conscious customers.
A surge in medical costs is unavoidable in a rapidly aging society. To
address the national challenge of extended healthy lifespans, it is essen-
tial to improve our prescription dispensing services and home healthcare
services more than ever, and further cultivate the fields of primary preven-
tion and secondary prevention. To this end, we are committed to provid-
ing a full lineup of services, ranging from advice on customers’ daily
lifestyles, such as diet and exercise, to support for alleviating customers’
symptoms, in cooperation with not only our pharmacists, but also our
nationally certified dietitians.
The current global spread of COVID-19 is continuing to stir anxiety
among citizens about their daily lives, especially in terms of society, the
economy and medical care. Filled with a sense of mission as a drugstore
operator focusing on prescription dispensing and home healthcare ser-
vices, we are continuing to manage approximately 1,300 stores through
the united efforts of all members of the corporate group. It is highly likely
that Japan and the rest of the world will experience a major turning point,
which will bring considerable changes to economic and social customs,
institutions, and patterns of consumption. No matter what changes will
occur, we will respond flexibly based on our management philosophy,
conduct daily reviews to identify how to continue to present appropriate
value for customers and society, continue taking on challenges in a wide
variety of fields, and create a future so that we can celebrate not only the
50th anniversary of our establishment, which will come soon, but also the
anniversary that will come in another 50 years.
The strongest points of the SUGI Pharmacy Group lie in our human
resources, who embody the concept “kindness” for each customer based
on his/her needs and in our management system designed to support such
human resources. We take advantage of every opportunity to ensure that
our management philosophy, which we have adopted as the principles
guiding us to growth, is anchored in each employee and is put into practice.
When employing and training pharmacists, beauty advisers, nationally cer-
tified dieticians and other specialists, we always place our emphasis on
human resources who can embody our management philosophy on a vol-
untary basis. By continuing these efforts, we can cultivate our employees’
sense of belonging and pass that on to new employees. We are confident
that this cycle makes our corporate group’s growth real and sustainable.
We would like to squarely address a wide variety of social problems,
such as the SDGs, all the more because the main operation of our corpo-
rate group concerns medical care, an important aspect of social contribu-
tion. With this background, in FY 2019, we established the Sustainability
Basic Policy, designed to focus on the following four issues regarding
sustainable corporate activities: Creation of products and services that
support perpetual healthy living; Development as a regional base that
supports the safety and security of all people; provision of a workplace
environment where employees can work comfortably and play active roles;
and efficient and environmentally friendly use of products and resources
by eliminating overdo, waste and unevenness. By addressing these four
issues and striking the best balance between the solution of social issues
and the increase in our corporate value, we would like to fulfill our social
responsibility and foster human resources who can embody the aforemen-
tioned management philosophy on a voluntary basis.
At our corporate group, we think that in order to unite such human
resources and their organizations, we must inevitably ensure good corpo-
rate governance. We have therefore established a corporate governance
system and implemented the necessary measures. To mention just a few
of these, we have not only a board of directors and a board of auditors,
but also a nomination and remuneration committee established at our
own discretion, with two of its three members being outside directors.
Moreover, to prepare for contingency situations that might gravely affect
our corporate group’s operations, such as large-scale disasters and pan-
demics, we also have a risk committee to conduct discussions and make
decisions regarding preventive and responsive measures.
Finally, we believe that our continuous growth requires not only mid-
to long-term investment in human resources, stores, systems and equip-
ment, but also a further increase in shareholder returns. Our specific
policy regarding shareholder returns is to distribute dividends on a stable,
continuous basis, while striving to achieve a payout ratio on a consoli-
dated basis of 30% at an early stage. We will continue to operate based
on our management philosophy and make steady progress toward
becoming an entity that can continue to grow 10 years ahead and even
20 years ahead. In this regard, we sincerely would like to ask for your
warm support.
Sincere, kind services make the SUGI Pharmacy Group sustainable. We are seeking to continue to grow over the next 10 years, and even the next 20 years.
What we aim for with our unchanged determination since our establishment has made us what we are today and will pave the way to the future.
Hirokazu SugiuraRepresentative Director & Chairman
SUGI Holdings Co., Ltd.
Eiichi SakakibaraRepresentative Director & President
SUGI Holdings Co., Ltd.
4 5Sugi Holdings Report 2020 Sugi Holdings Report 2020
Business Environment and Requirements for Drugstores
Responding to the super-aging society and taking
advantage of digital technology to present a new
form of customer experience
For the domestic business environment, it is expected that society will experience not only a change in demographics caused by the super-aging society and a decrease in the working-age population, but also an accelerated change in the industrial structure due to AI, IoT and other types of technological innovation.
Since the beginning of the 2000s, the drugstore market has grown considerably, mainly in the field of healthcare, including pre-scription dispensing, and also in the field of sales of food products. Advancement of the aging society is pressuring the medical budget, leading to a growth in demand in the areas of primary prevention/secondary prevention and elderly nursing care/daily life support, and to a rise in the expectations placed on drugstore operators with their focus on local communities.
The entire retail industry is seeing a very rapid introduction of digital technology, and also a change in consumer behavior. When purchasing products and services, consumers today check social media to collect information that satisfies their needs, instead of depending on conventional forms of media, such as newspapers and TV commercials, which are used to disseminate information based on mass-marketing. Consequently, it is becoming increasingly important to conduct not only the conventional forms of mass-marketing, but
also One-to-One marketing to provide individuals with information on products and services catering to their needs.
It is, of course, significant to pursue efficiency and convenience by making good use of AI, IoT, etc. to provide products and services to customers. Regardless of the extent of the progress of digitization, however, we believe that we will eventually be required to enable customers to experience face-to-face communication at physical stores, and make our products, services, and customer treatment serve as an opportunity to forge long-lasting ties with such customers.
On the other hand, when looking at the prescription dispensing market, we note the Pharmacy Vision for Patients, released by the Ministry of Health, Labour and Welfare. The ministry is expecting prescription dispensing pharmacies to make a shift by 2035 from the present operation style as “pharmacies located near medical institu-tions to support the separation of dispensing and prescribing func-tions.” There is a call for prescription dispensing pharmacies to play a major role in the comprehensive community care system, and to become 24-hour home healthcare and health support providers through the use of IoT. Prescription dispensing pharmacies are required to transform themselves into “pharmacies to support the separation of dispensing and prescribing functions with their focus on local patients.” High expectations are placed on pharmacies to serve as family pharmacies from which local residents can seek pharmaceu-tical advice on medicines without hesitation at any time, and to carry out high-level pharmaceutical management.
Promoting the Total Healthcare Strategy to underpin people’s health from a wide variety of aspects, and developing our stores to serve as a platform for supporting their health
Feature Article Strategy Explained by Vice President
Katsunori SugiuraRepresentative Director & Senior Vice PresidentSUGI Holdings Co., Ltd.
Three Growth Strategies to Enhance Our Corporate Value
Total Healthcare Strategy to maximize customers’
lifetime value
In order for the SUGI Pharmacy Group to accomplish even more growth, we need to use digital technology to ensure contact points with customers at all stages, ranging from primary prevention and secondary prevention to medical treatment, elderly nursing care and terminal care, and to provide support for the healthy daily lives of local residents mainly through our corporate group’s strong points, namely stores, human resources and our ties with local communities. This constitutes our corporate group’s Total Healthcare Strategy.
To satisfy each customer on a continuing basis at every health stage from his/her birth until the end, we will endeavor to enhance our customers’ lifetime value through a network formed mainly by physical stores and a digital network of, for example, smartphone apps.
Evolution to a next-generation store model serving
as a health station
To further improve our physical stores, we will evolve the existing model into a next-generation store model to address the super-aging society. To this end, we will focus on the development of community healthcare stores featuring medical institutions, elderly nursing cen-ters, patient nursing stations, etc.
For community healthcare stores, we will reinforce the develop-ment of not only “pharmacies with the function of prescription dis-pensing,” which is one of our advantages, but also “pharmacies featuring medical malls or clinics” to serve as a bridge between local patients with even better medical care. In addition, we will also pro-mote the development of “on-the-premises” pharmacies. Unlike
so-called “pharmacies located near medical institutions,” such phar-macies are situated on the premises of medical institutions to support increasingly sophisticated medical care and accommodate the needs of both doctors and patients. By developing these three types of community healthcare stores, we will evolve into an operator of health stations with a focus on local communities.
Furthermore, to respond to changes in social needs, such as increases in the number of senior citizens who find it difficult to go shopping and the number of double-income couples, we will improve our lineup of microwave meals and so-called “smile care foods” for senior citizens, and thereby strive to develop into an operator of even more convenient, one-stop shopping centers.
Creating new value through cooperation with
like-minded stakeholders
We will present a wide variety of suggestions to create new value in the belief that we can cause innovation in the healthcare industry by integrating physical stores, highly specialized human resources, such as pharmacists and nationally certified dieticians, and future digital technology.
As a corporate group aiming to develop a business model to cater to all customers at their different health stages, we strive to establish close ties with and gain the trust of local governments, companies and their health insurance associations, and medical and elderly nursing-care workers. To provide even more in-depth services even more extensively and promptly, we would like to promote our strategy through cooperation and collaboration with like-minded local govern-ments and companies.
Continuing to Improve the Quality of Our Operations All the More Because Our Operations Themselves Contribute to Society
Presently, we are pushing forward with the Total Healthcare Strategy, thereby facilitating our expansion in terms of both quality and quan-tity. We understand that this means that our social responsibilities are also increasing considerably. A wide variety of social challenges are now becoming evident and more serious, including the aging popula-tion, lower birthrate and a declining population in Japan, as well as climate change, resource problems and human rights issues both at home and abroad.
We are confident that our operations themselves, which are intended to accommodate local needs with our foothold in pharma-cies and drugstores, contribute to local communities and society. We believe that we can achieve sustainable corporate growth if we can realize our corporate group’s management philosophy by acting as a corporate group focusing on local communities, adapting to social changes, living up to the demands and expectations of stakeholders, solving social problems and contributing to the formation of a sus-tainable society.
6 7Sugi Holdings Report 2020 Sugi Holdings Report 2020
0100020003000400050006000 売上高(億円)
'76 '88'82 '89 '90 '92'91 '93 '94 '96'95 '97 '98 '00'99 '01 '02 '04'03 '05 '06 '08'07 '09 '11 '18'14'10 '17'16'13 '15'12 '19
2002~2005~
2015~
2018~
1976~
1976 1990 1995 2000 2005 2010 2015 2019
6,000
5,000
4,000
3,000
2,000
1,000
0Net sales
(100 million yen)(FY)
The Growth of the SUGI Pharmacy Group
Toward an Operator of “Family Drugstores” Serving as the Cornerstone of Lifetime SupportPartly because both the present Chairman Hirokazu Sugiura and the present Adviser Akiko Sugiura are both pharmacists, the SUGI Pharmacy
Group displays a firm sense of determination especially in terms of prescription dispensing services. This has led us to take on the challenge
of developing a chain of prescription dispensing drugstores, which were still rare in Japan at the time of our establishment. In addition, we
have been working on the provision of home healthcare services since our early days in order to serve as a vital part of the infrastructure for
local communities by providing services truly required by customers and underpinning the super-aging society. We will secure a wide variety
of contact points between customers and our human resources, who boast high-level expertise and who have inherited our sense of deter-
mination since our establishment, plus digital contact points through the use of apps, for which demand is expected to grow in the future. In
this way, we will endeavor to present value required by customers.
Original business modelPrescription dispensing drugstore Expansion of the operating
area into the Kanto and Kansai regions
Offensive management approachDevelopment of the Total Healthcare Strategy
■ Expansion into the Kansai region (2002)■ Launch of home-visit prescription dispensing service (2002)■ Acquisition of 50.1% of the stock of Japan Co., Ltd., making the
company a consolidated subsidiary (2005)■ Launch of drugstores featuring medical malls (2005)■ Expansion into the Kanto region (2006)
■ Acquisition of full ownership of Japan Co., Ltd. (2007)■ Acquisition of full ownership of Izuka-yakuhin Co., Ltd. (2008)■ Establishment of SUGI Holdings Co., Ltd. (2008)■ Establishment of SUGI Medical Co., Ltd. and launch of home-visit
nursing and elderly home-care support services (2008)
■ Establishment of key stores serving as the hub of a community healthcare network, and launch of health community activities (2013)
■ Launch of rental and sales of welfare products (2014)■ Completion of the Obu Center (our logistics center)
(2016)■ Expansion into the Hokuriku region (2017)
■ Conclusion of a capital and business alliance with the MedPeer Group (2018)
■ Conclusion of a capital and business alliance with M-aid Inc. (2018)
■ Establishment of MCS Co., Ltd. as a company that recruits and staffs medical workers (2018)
■ Establishment of DCP Solution Co., Ltd. to provide support for doctors to open clinics (2018)
■ Launch of specific health guidance (2019)■ Establishment of an “on-the-premises” pharmacy
(Nagoya University Hospital Store) (2019)■ Conclusion of a capital and business alliance with
Inagora Holdings Co., Ltd. (2020)■ Establishment of S Trading Co., Ltd. to supply products to
foreign markets (2020)
生涯サポートの中核となる「かかりつけドラッグストア」へ
Launch as a small “family pharmacy” in Nishio, Aichi
Operation development
Milestones of the SUGI Pharmacy Group
2000~2010 2011~2020
■ Establishment of a training center to foster pharmacists (2001)■ Establishment of stores featuring clean rooms to provide
terminal care (2003)
■ Establishment of the CSR Office and participation in the Pink Ribbon Campaign (2008)
■ Establishment of SUGI Smile Co., Ltd. to promote disabled employment (2009)
■ Launch of cosmetic therapy at facilities for senior citizens and hospitals (2009)
■ Launch of donation of AEDs to facilities for senior citizens (2013)■ Launch of donation of medical wigs to breast cancer patients (2013)■ Launch of support for children with intractable diseases and their families (2014)■ Launch of a program of comprehensive partnership agreements with local governments
(2017)
■ Conclusion of a partnership contract with FC Kariya, a member of the top division of a nonprofessional soccer league sponsored by companies in the Tokai region (2018)
■ Acquisition of Platinum Kurumin certification (2018)■ Launch of a demonstration test for a shared pick-up and drop-off service in Toyoake,
Aichi (2018)■ Acquisition of certification as an outstanding enterprise in terms of health and productiv-
ity management (2020)
Community healthcare
Social contribution
2011~20202000~2010
Launch of health community activities
Launch of home-visit nursing service
Launch of home-visit prescription dispensing service
201320082002
Establishment
The number of drugstores exceeds 100 The number of drugstores exceeds 500 The number of drugstores exceeds 1,000
Expansion of the scale of our operation through M&A
Consolidation of our foundation and framework for growthEstablishment of our administration organization, management accounting system, HR system, many other systems, and logistics infrastructure
8 9Sugi Holdings Report 2020 Sugi Holdings Report 2020
Stores
Customers
EmployeesPrescription Dispensing
* Data sourceDrugstore data: Drugstore Fact-Finding Survey by the Japan Association of Chain Drugstores; prescription dispensing data: Trend Survey for Medical and Prescription Dispensing Costs by the Ministry of Health, Labour and Welfare; and documents released by each company in the industry
344
13
479
451Kanto area
Kansai area
Chubu area
Hokuriku area
* Data source: Trend Survey for Medical and Prescription Dispensing Costs by the Ministry of Health, Labour and Welfare
Business Environment Surrounding the SUGI Pharmacy Group
Figures relating to the SUGI Pharmacy Group (FY 2019)
● Sales ● No. of prescriptions filled by us
● No. of medical institutions whose prescriptions are filled by us (annual total)
● Net sales on a consolidated basis
Up 11.0% from the previous year541.9 billion yen
Up 15.6% from the previous year105.2 billion yen
Up 13.1% from the previous year9.83 million
Approx. 45,000
6,182 Pharmacists: 2,800Beauty advisers: 1,139
Nationally certified dieticians: 425
Nurses: 87
Market share in the drugstore industry and the prescription dispensing pharmacy industry (FY 2018)
Drugstore market Prescription dispensing pharmacy marketMarket share of the top 10 companies Market share of the top 10 companies
SUGI Pharmacy Group Today
Approx.
18%
There is no extreme concentra-tion of market share among the top companies, meaning that significant changes in the consti-tution of the present market share situation can occur as a result of each company’s strategy or the development of alliances or partnerships.
There has been extremely slow progress toward an oligopolistic market, with mid- and small-scale pharmacies accounting for approximately 80% of the market. At the same time, there has been remarkable growth in prescription dispensing drugstores, leading to ongoing change in the main market players.
● Employment rate of persons with disabilities
2.47%
Approx. 70%
Drugstore market scale
7.2 trillion yen
Prescription dispensing pharmacy
market scale
7.4 trillion yen
Percentage of prescription dispensing stores
80.0%
Women
45.9%
Men
54.1%
■ Prescription dispensing 22.0%
■ Healthcare 21.4%■ Beauty items 20.6%■ Household ware 18.8%■ Food 17.1%■ Others 0.1%
Percentage of sales by category of the SUGI Pharmacy
operations (excluding sales of our
subsidiary Japan)
A 調剤 B店舗
スギ薬局様 イラストレーション
Cお客様
D従業員 E来店客数 Fスギ薬局カード会員数
Gデジタル会員数
0000 0000000000 0
A 調剤 B店舗
スギ薬局様 イラストレーション
Cお客様
D従業員 E来店客数 Fスギ薬局カード会員数
Gデジタル会員数
0000 0000000000 0A 調剤 B店舗
スギ薬局様 イラストレーション
Cお客様
D従業員 E来店客数 Fスギ薬局カード会員数
Gデジタル会員数
0000 0000000000 0
* No. of full-time employees(10 thousand prescriptions)1,1001,200
1,000
800
600
400
200
0
(%)
125
120
115
110
105
1002009 2010 20122011 2013 2014 2015 2016 2017 2018 2019 (FY)
Y-t-y comparison of the no. of prescriptions �lled by us (right axis)
■ No. of prescriptions �lled by us (left axis)
Annual double-digit growth achieved continuously since our establishment
Y-t-y comparison of prescriptions �lled in the entire market (right axis)
● Operating income on a consolidated basis
29.7 billion yen
Up 15.3% from the previous year
● No. of stores
Up 97 stores from the previous year1,287 stores
A 調剤 B店舗
スギ薬局様 イラストレーション
Cお客様
D従業員 E来店客数 Fスギ薬局カード会員数
Gデジタル会員数
0000 0000000000 0
■ SUGI Pharmacy: 1,163 stores(Including 930 prescription dispensing stores)
■ Our subsidiary Japan:
113 stores
■ Home-visit nursing stations:
11 stores
Approx. 270 million
● No. of annual visitors
● No. of employees ● No. of experts * Including partner employees
Approx. 16 million
0000 0000000000 0
● No. of SUGI Pharmacy card members
* Total no. of downloads of SUGI Pharmacy app, SUGIsapo app, and SUGI Pharmacy prescription notebook app.
Approx. 4.4 million
● No. of digital members
Gender ratio
10 11Sugi Holdings Report 2020 Sugi Holdings Report 2020
eeveryone
Closer and More Reliable to Local Residents So That They Can Seek Advice More Readily
Operations Advantages
We have presented value to society based on our corporate watchwords and our strategies for embodying them. We will continue to
underpin local residents’ rich lifestyles and healthy living and accommodate community healthcare needs, thereby contributing to society’s
sustainable development.
Aging population and lower birthrate
Increase in medical costs
Innovation of digital technology
Diversification of values
Foundation underpinning the management of the corporate group
Management philosophy
Vision Our pledge
External environment
Sound financial foundation
Network of approx.
1,300 stores
Customer base of approx. 16 million customers
Human resources
embodying the concept “kindness”Employees
Store network
SUGI Pharmacy card members
Expertise of the prescription dispensing
drugstore model
Maximize Customers’ Lifetime Value based on Lifetime Contact Points with Customers
Total Healthcare Strategy P14
Self-care Medical care and medication
Elderly nursing support and daily life support
P2
P26
SUGI Pharmacy Group’s Business Model
Thorough Compliance Management and Risk Management
Reinforcement of Corporate
Governance
Sustainable Management
P18
P30
Mid-Term Management Plan
P16
P34
Home healthcare
Preventive care
Drugstore operation
Prescription dispensing
Value Creation Process
Realize a society
where everyone
smiles and is happy
12 13Sugi Holdings Report 2020 Sugi Holdings Report 2020
Key store
Research institute (university)
Fitness club
Health insurance
association
Health checkup
institution Local government(Municipality and comprehensive
community support center)
Elderly nursing service provider
Home-care support
clinic
Pharmacy
Hospital Strategic Dominance of Setting Up New Branches around Key Stores
By proceeding with the development of solution-oriented “key stores,”
which underpin our strategic dominance, we place the emphasis of our
store-opening strategy on the creation of hubs of healthcare networks
evolving around our key stores.
* Our key stores fulfill the enhanced function of health support expected to be pro-
vided by drugstores. The stores feature a self-service space for customers to take
health measurements, while providing health counseling, health instruction and
prescription dispensing services. They also feature a medical institution, lease and
sell welfare products, and provide home healthcare. In addition, they also have a
community space where events by nationally certified dieticians and pharmacists
hold events on a regular basis.
In the Total Healthcare Strategy, people’s lives from their birth until the end are divided roughly into the three stages covered by the self-care
category, the medical care and medication category, and the elderly nursing support and daily life support category. The strategy is intended
to ensure contacts points with customers, regardless of their health condition, and provide optimum products and services appropriate for
the condition of customers in different stages by integrating our physical advantages with digital technology. To push forward with the
strategy, we emphasize close ties and trust between local governments, companies and their health insurance associations, and medical and
elderly nursing-care workers. By expanding our network even outside our corporate group, we are striving to become an operator of drugstores
as an indispensable entity for local communities.
Efforts Made under the Total Healthcare Strategy Total Healthcare StrategyAt the SUGI Pharmacy Group, we are striving to develop a business model to underpin every health stage of our customers by proceeding with a
wide variety of operations in the healthcare field based on the sales of drugstore items.
Corporate Alliances to Proceed with the Total Healthcare Strategy
SUGIsapo Walk SUGIsapo Deli
Released in March
2019
Released in November
2018
Released in August
2019
SUGIsapo Walk/SUGIsapo Eats B-to-C service
Self-care support service designed to assist users to improve their daily lives in such aspects as walking and eating
SUGIsapo Deli B-to-C serviceMeal delivery service under the supervision of nationally certified dieticians
Specific Health Guidance B-to-C service
Health guidance service provided by nationally certified dieticians at stores to encourage preventive and improvement behaviors against metabolic syndrome
Choi-soko B-to-C service
Joint program in collaboration with a local government and Aisin Seiki Co., Ltd.Mobility support service mainly for senior citizens to travel to and from local facilities
Lifestyle-related Disease Risk Report
B-to-B/B-to-C service
Analysis of each individual’s health checkup results with reference to the health checkup data of 1.5 million peopleReport service to encourage preventive behaviors against lifestyle-related diseases
Launched in August
2019
Launched in July 2018
MedPeer Group
Operation of an online doctor community site in which 120,000 doctors are regis-tered, and development of an online medical business and preventive care business through the use of IT
M-aid
Development of a health management support service for companies through a combination of an integrated management system of health checkup data, apps, and health measurement devices
Capital and business alliance
concluded in March 2018
Capital and business alliance
concluded in March 2018
Health checkup
Fitness
Health counseling and measurement
Prescription dispensing
Online counseling, medical treatment, and medication instruction
Primary prevention
(Healthy lifestyles)
Secondary prevention
Health checkup
Diagnosis Treatment
Chronic-phase management
Elderly nursing care
Terminal stage
Personal health record
(PHR)
Long-term elderly nursing care
Terminal care
Self-care categoryMedical care and
Medication categoryElderly nursing support
and daily life support category
Showing a commitment to local residents’ lifetime efforts for disease prevention and health management, and contributing to their good health through a full lineup of care
Healthcare network connecting approximately 1,300 physical stores and local communities
Value Creation Process
14 15Sugi Holdings Report 2020 Sugi Holdings Report 2020
Mid-Term Management Plan 2022— Toward Enhancing Our Corporate Value by Maximizing Customers’ Lifetime Value —
We have been pushing forward with our growth strategies, such the Total Healthcare Strategy, to expand our management foundation,
including logistics centers, under the slogans of “Consolidation of our foundation and framework for growth” since FY 2015 and “Aggressive
management approach” since FY 2018. Today, as these efforts are producing the desired results, we will accelerate the speed of our reforms
to further enhance our corporate value, by reviewing the Mid-Term Management Plan 2020 a year ahead of the original schedule and pro-
ceeding with our operations based on a new three-year mid-term management plan from FY 2020.
■ Overview of the Mid-Term Management Plan
Strategy for Opening New StoresMaximization of Customers’ Lifetime Value
Consolidating digital membership as the cornerstone for providing customer experience
Hokuriku: 80
Kansai: 530
Chubu: 560
Kanto: 430
FY 2022 Target Number of Stores to Be Opened in Each Area
FY2015–FY2017 FY2018–FY2019 F2020–FY2022
Consolidation of our foundation and framework for growth
Enhancement of our corporate value by maximizing customers’ lifetime value
Aggressive management approach
An important index for customers’ life-time value is the number of app members.
We will ensure that SUGI Pharmacy apps serve not only as tools for sales promotion and dissemination of infor-mation, but also as the “gateway” to our digital contact points, thereby enabling us to provide even better ser-vices, including via the health support app SUGIsapo Walk.
SUGIsapo Walk has an entertain-ment aspect, enabling all genera-tions, from young people to senior citizens, to enjoy walking, and it is expected to attract many more visitors to our stores.
Holding a dominant share by opening stores on an aggressive note, and making our stores even more competitiveWe intend to push forward with strategic dominance in the three large metropolitan areas in Japan of Kanto, Chubu, and Kansai, while accelerating our efforts to
open stores in Hokuriku as a new growth area. Our plan is to establish 120 new stores in FY 2020, and then more than 100 stores per year.
Viewing a wide variety of future changes in the social environment as excellent opportunities for us, we will open competitive, next-generation stores that will be
even closer to and more reliable for local residents.
3.5 million members(Result as of the end of FY 2019)
0.6 million users(Result as of the end of 2019)
10 million members(Target for the end of FY 2022)
5 million users(Target for the end of FY 2022)
Synergy
“Pharmacies with the function of prescription
dispensing”Expanding the standard model as
an advantage that we have maintained since our
establishment
“Pharmacies featuring medical malls or clinics”
Reinforcing cooperation with medical institutions from the perspective of local
medical infrastructure
“On-the-premises” pharmaciesReinforcing support for sophisticated
medical care as an import base connecting central hospitals and local stores
(FY 2019 result: Nagoya University Hospital Store)
Mutual sharing of patient
information
A medical mall or clinic located on a store’s second floor or in a parking area
Online+
Home healthcare+
Lifestyle-related disease risk report
· SUGIsapo Walk app· SUGIsapo Eats app
· SUGIsapo Deli· Omotenashi service
· SUGI Pharmacy prescription notebook app
Physical and digital communication
Physical store Online
Integrated customer database
Shopping Beauty Prescription DispensingHealth
Medication instruction
Health checkup
Social media and video
SUGI Pharmacy app
Health management and online counseling
EC
Counseling Experience
SUGI Pharmacy card
Medication management and support
Store Online app
Growth strategy
1 Reinforcement of our sales power• Reinforcing our operations in existing areas (opening stores, frequently-visited stores &
experience-oriented stores, dispensing prescriptions)• Expanding into new growth areas (inbound tourists and overseas markets)
2Reinforcement of management with the focus on customers’ LTVLTV: Lifetime value
• Proceeding with the Total Healthcare Strategy• Enhancing customers’ LTV by integrating our physical and digital assets
3 Expansion of cooperation and collaboration• Concluding alliances and M&A transactions (within or outside the industry)• Optimizing the entire value chain process through information sharing
Reinforcement of the
management foundation
4 Promotion of DX in managementDX: Digital transformation
• Presenting new forms of customer experience through the use of digital technology• Optimizing our existing operations through the use of digital technology
5 Improvement of productivity• Opening new stores with high investment efficiency and renovating existing stores• Enhancing operational productivity (abolishing unnecessary tasks, employing part-time
workers, and proceeding with automation)
6 Reinforcement of human resources and organizations
• Employing and training human resources to make our stores even more robust and fostering key players who will underpin the next generation
• Making our organizations more streamlined and less hierarchical toward increasing our productivity and expanding into new business fields
FY2022 Quantitative target • Net Sales ¥710.0 billion, Operating profit ¥37.0 billion (Profit rate 5.2%)
Strategy for Dispensing Prescriptions
Establishing a prescription dispensing and medical care network by adopting three types of community healthcare storesWe will proceed with a combination of the three types of community healthcare stores: “pharmacies with the function of prescription dispensing,” or the prescription
dispensing drugstores that we have developed so far; “pharmacies featuring medical malls or clinics” to provide one-stop medical services from the viewpoint of the
community medical infrastructure required in the age of the super-aging society; and “on-the-premises” pharmacies, designed to support increasingly sophisticated
medical care. While achieving cooperation with local medical institutions, we will ensure that patient information is shared regardless of the type of pharmacies that
the patients use, and establish a network of prescription dispensing and medical care to underpin local residents’ safe and secure daily lives.
Creating customer experience through customer communication enhanced by integration of our physical and digital assetsWe believe that the key lies in the concept of customers’ lifetime value based on a lifetime relationship established between us and each customer by strengthening
the contact points with them. From now on, we intend to provide a wide variety of products and services well-tuned to the needs of each customer in a timely manner
both at physical stores and online, thereby striving to increase customer satisfaction and maximize our customers’ lifetime value.
Super-aging societyIncreases in the numbers of single-person households
and women with careers
Evolution to an operator of next-generation stores where one-stop services regarding medical care, welfare, and daily lives are available
Featuring a clinicFeaturing a medical mall
Prescription dispensing drugstore
Health community function
Counseling and support for elderly nursing
Home-visit nursing
Rental and sales of welfare products
Alliance in the field of medical care
Alliance in the field of elderly nursing and patient nursing
Expansion of our lineup of food products
Expansion of our lineup of services
Strengthening the functions of community healthcare and welfare infrastructure
Additional function as an element of the community life infrastructure
+Delivery
EC
Shopping support
Health-oriented product
Smile care foods
Microwave meals
Meals for single dwellers
16 17Sugi Holdings Report 2020 Sugi Holdings Report 2020
Sustainability & Priority Issues
Proceeding with Sustainable Management
Each customer’s happiness
Everyone’s happiness
Each employee’s happiness
Everyone’s happiness
<Sustainability Basic Policy>
The SUGI Pharmacy Group aims to contribute to the sustainable development of local communities through cooperation with
stakeholders, in order to realize a vigorous society by seriously addressing a wide variety of environmental and social issues
and increasing the number of healthy and energetic people through corporate activities.
As a corporate group that focuses on local residents’ daily lives, we believe that it is important to adapt to social changes, and live up to the demands
and expectations of stakeholders. To do so, if we solve social problems and contribute to the formation of a sustainable society, and thereby realize
our corporate group’s management philosophy, we can achieve sustainable corporate growth. With this background, we have established the
Sustainability Basic Policy, which is designed to focus on four issues regarding sustainable corporate activities and proceed with various efforts.
<Relationship between Our Priority Issues and the SDGs>
Priority issues regarding sustainable corporate activities Major efforts Related SDGs
●● Development and provision of services to enhance people’s health and welfare through integration of physical and digital assets
●● Development and provision of value-added products to contribute to users’ good health and high-quality lives
●● Increase in customer satisfaction through the use of digital technology
●● Development of stores as the cornerstone of local residents’ daily lives and local communities
●● Development of stores that cater to local needs in the fields of medical care and welfare services
●● Expansion of our service lineup and infrastructure in the age of the super-aging society
●● Contributing to the enhancement of community safety and security
●● Realization of diversity in working styles●● Support for each employee to fully demonstrate his/her
capabilities●● Employment support for senior citizens and the disabled●● Enhancement of employees’ good health
●● Reduction of waste products and returned goods by realizing efficient product procurement and efficient delivery methods in cooperation with business partners
●● Development and sales of environmentally-friendly products●● Promotion of the use of reusable bags
Development as a regional base that
supports the safety and security of all people
Provision of a workplace environment where
employees can work comfortably and play active roles
Efficient and environmentally friendly use of products and
resources by eliminating overdo, waste and unevenness
P20–21
P22–25
P26–28
P29
Creation of products and services that
support perpetual healthy living
18 19Sugi Holdings Report 2020 Sugi Holdings Report 2020
SNDP® technology involves coating four types of moisturizing
components for beautiful skin
Prieclat, the result of cutting-edge technology jointly developed with Kyushu University
Creation of Products and Services That Support Perpetual Healthy Living
Providing support for each individual’s health through SUGIsapo apps designed to encourage users to walk more frequently and assist them with healthy dietary habitsSUGIsapo apps, intended to support users’ exercise, diet and self-care, are used not only by customers living in our operating areas, but also by many other
smartphone users. We are striving to establish relationships with customers in order to encourage them to be more aware of their health and change their
behaviors so that they can maintain their good health.
Providing innovative products developed with unprecedented technology through industry-academia cooperation, and supporting users’ daily livesWe will reinforce and revamp the product lineup of our private brand (PB), which consists of the categories of Royal, Middle, and Basic, with a particular
focus on the development of high-quality and value-added products.
To increase the current low rate of dependents getting health
checkups, we provide opportunities for them to have health
checkups more easily at the stores where they usually go, and
also receive specific health guidance from nationally certified
dieticians. By doing so, we would like to contribute to
increasing the health checkup rate to help dependents stay
healthy and reduce their insurance premiums.
Providing facility-visit health checkup services and specific health guidance to ensure that many more dependents have health checkups at stores in their local communities
Development and provision of services to enhance people’s health and welfare through integration of physical and digital assets
Development and provision of value-added products to contribute to users’ good health and high-quality lives
FY 2019 results
No. of sets sold: 70,007 No. of users: 8,536
FY 2019 activities
Japan Health Insurance Association
National Health Insurance Society
No. of facility-visit health checkups 11 4
No. of those who received facility-visit health checkups
689(Health checkup and cancer screening)
194(Cancer screening)
No. of those who received specific health guidance 1,224
This is an incentive-type pedometer app that allows users to earn SUGIsapo Miles, which can be exchanged with SUGIsapo Points to be used at our stores. The daily active user (DAU) rate among those in their 60s and over is 55%, enabling the app to rank first among a number of pedometer apps. The average number of daily steps by users exceeds the targets set under Health Japan 21 (second term) for those aged 65 and over (men: 7,000 steps; women: 6,000 steps), showing that the app contributes to enhancing senior citizens’ good health.
Supervised by nationally certified dieticians, the menu items of this app are popular not only among those who are on a restricted diet, but also those seeking to have an even healthier diet. Featuring a product lineup according to themes, all items are highly acclaimed in terms of price, quantity, and taste, leading to repeat purchases. A health counseling service is also available, further enhancing users’ reliance on the app.
Rakuraku 331
4,000 5,000 6,000 7,000 8,000 9,000 10,000
SUGIsapo Walk user
SUGIsapo Walk user
Men
Women
Men
Women
Targets set under Health Japan 21 (second term)
Source: National Health and Nutrition Survey, 2018
8,2907,644
6,705
5,417
4,759
National averageAged 65 and over
National averageAged 20 to 64
Average number of steps per person
7,304
Containing yeast 331, this
series helps users to walk
smoothly in their daily lives.
Popular products in the Royal category
We will enhance the lineup of the Prieclat series through a step-by-step
launch of a spot removal cream and a drink for beautiful skin.
SUGIsapo Walk SUGIsapo Deli
Hydrolysis hyaluronic acid
Vitamin E derivative*3
Vitamin C derivative*2
Water-soluble proteoglycan
* Conceptual illustration
SNDP® technologyThe SNDP® technology for special lipophilic layer nanocoating with inner/outer
double structure can deliver water-soluble/polymer components even to the
corner of the stratum corneum by nano-dispersing oil/water-soluble material.
Four types of moisturizing components penetrate into the stratum corneumFeaturing cutting-edge technology for enhancing the pene-tration of effective components, Prieclat contains four types of safe and biocompatible components as moisturizers for beautiful skin. *2: Phosphoric acid ascorbyl Mg *3: Acetic tocopherol
Based on percutaneous penetration technology researched by Kyushu University, with the aim of eliminating injections from
the world, we have jointly developed the patent technology SNDP® to enable effective components of cosmetics to be delivered
deep to the inside of the stratum corneum. This technology is recommended by Kyushu University as an excellent result of the
Nano-technology Platform Japan Program of the Ministry of Education, Culture, Sports, Science and Technology.
Sustainability & Priority Issues 1
20 21Sugi Holdings Report 2020 Sugi Holdings Report 2020
Development as a Regional Base That Supports the Safety and Security of All People
Development of stores as the cornerstone of local residents’ daily lives and local communities
Expansion of our service lineup and infrastructure in the age of the super-aging society
Contribution to the enhancement of community safety and security
We have an area system in which each area is covered by 10 local stores to provide even better services
with greater focus on their communities, by considering how to enhance customer satisfaction. The key store
in each area plays the pivotal role, in cooperation with administrative agencies, in organizing walking events
and promoting other efforts to enhance residents’ good health and beauty.
No. of participants No. of counseling sessions held
FY 2019 56,893 3,230
Providing home-visit prescription dispensing services and home-visit nursing services as a framework underpinning a comprehensive community care systemTo help local residents maintain their own lifestyles in familiar surroundings, we provide highly-acclaimed, high-quality support services, ranging from daily conversations with patients to high-level medication management, through cooperation involving a wide variety of medical experts, such as doctors, pharmacists, and nurses. With an increase in the number of users of our home-visit prescription dispensing services and home-visit nursing services, we will continue to focus on these services to contribute to community healthcare.
Shifting our focus from “merchandise” to “experience” and transforming ourselves into a local health station for sharing critical moments with local residentsWe are establishing many more stores featuring a community space with health measurement equipment. While ensuring that the customer experience of making health measurements at our stores leads to the development of the habit of having a health checkup every time they visit the store, we would like to provide opportunities for local residents to gather and converse with one another by holding health counseling sessions. We are thus proceeding with the creation of a foundation for local residents’ good health and daily lives.
Concluding comprehensive partnership agreements with local govern-ments as the starting point of community communicationWe are reinforcing sustainable efforts toward solving community problems through mutual cooperation based on comprehensive partnerships between local governments and SUGI Pharmacy. Our particular focus is on community development to promote the wellness of local residents by using the assets of our stores and experts. We organize a wide variety of events that are accessible to local residents and enable participants to enhance their good health.Comprehensive partnership agreements with 13 municipalities; non-health-insurance-covered service agree-ments with 2 municipalities; disaster damage reduction agreements with 27 municipalities and 2 organizations; and watching-over agreements with 9 municipalities (as of the end of February 2020)No. of events held in FY 2019: 239
Providing the Omotenashi service, a life-support delivery service to help senior citizens and sick people who find it difficult to go shoppingWe have launched this delivery service in response to the demand from patients receiving medical treatment at home or nursing facilities and from their families wishing to receive not only medication but also daily-life products. By handling a wide variety of daily essentials from sanitary supplies and products to food, we will continue to contribute to an even better quality of life of those who cannot visit our stores.
Addressing the inconvenience of local transportation through Choi-soko, a mobility support serviceChoi-soko is a joint project with Aisin Seiki Co., Ltd. to provide a shared pick-up and drop-off service as a form of daily support for citizens who find it difficult to go to shopping facilities and medical institutions. Simply by making a reservation on the phone, the service users are transferred to reg-istered facilities, such as administrative agencies, medical institutions and some of our facilities, at the desired time. This easy-to-use service leads senior citizens to go out more frequently, which contributes to their good health.
In the FY 2019 Good Design Awards by
the Japan Institute of Design Promotion,
we were granted the Good Focus Award
(New Business Design). The award is
granted to entities in recognition of their
creation of a new business model or new
industry, or in recognition of an excellent
design expected to contribute to the promotion of innovation.
No. of service stores Monthly no. of users
Home-visit prescription dispensing
48710,740
(Annual total no. of users: 128,880)
Home-visit nursing 11
961(Annual total no. of
users: 11,532)
(As of the end of February 2020)
Choi-soko was selected as one of the Good Design Best 100 and also given a special award
Cooperating with Obu City in its health programOrganized by Obu City, Aichi Prefecture, using Karada Karte® of Tanita Health Link Inc., to increase citizens’ interest in their health, this program is joined by approximately 800 participants with activity trackers. Our stores located in the city have installed reader-writer devices to send data from the activity trackers. The participants visit the stores to upload their tracker data, and receive advice on exercise and diet from nationally certified dieticians there. By ensuring this process, the program intends to improve the retention rate and increase the amount of physical activity by participants.
Organizing a health festa as an opportunity for interaction among local residentsWe organize a wide variety of events in various parts of Japan, ranging from measurements of body composition and bone density to health counseling, parenting counseling, skin checking, make-up experience and pharmacist career experience, as fun opportunities to consider health. We ensure that these events enhance participants’ awareness of their health and enable us to earn many more customers.
Supporting walking events for citizensWe support walking events organized by a local gov-ernment and a railway company. While discovering new attractions within their communities while walk-ing, participants in the events are expected to drop in on our stores registered as check points, where they can receive product samples and take health mea-surements. By providing these opportunities, we would like to contribute to the good health of local residents while also making promotional efforts.
Organizing food education eventsWe organize sandwich cooking workshops for children and their parents, with nationally certified dieticians serving as instructors. We also propose recipes that are good for lowering vascular ages. By doing so, we strive to support the good health of all family members from children to senior citizens. In addition, we hold food education events not only at our stores but also at Michi-no-eki (roadside rest areas), extending the scale of the educational program in order to accommodate local needs.
Sustainability & Priority Issues 2
22 23Sugi Holdings Report 2020 Sugi Holdings Report 2020
Contribution to the enhancement of community safety and security
Donating life-support materials to the Okazaki Medical Center of Fujita Health University
Providing support for children with intractable diseases and their families
Promoting the Pink Ribbon Campaign
Offering cosmetic therapy to provide comfort and relaxation
Donating first-aid kits to local children
Donating and installing AEDs to save many more people
We donated life-support materials to the Okazaki Medical Center of Fujita Health University, which accepted those who had tested positive
for COVID-19 but displayed no symptoms and those who had had close contact with them. We provided approximately 100 kinds of items,
including sanitary goods, such as disinfectant spray and disinfectant wipes, and beverages and paper products. We did so to support those
staying at the center for follow-up observation and medical experts involved in infection control.
In FY 2014, we began to invite children with intractable diseases and all their
family members to an amusement theme park. Inviting 16 families annually,
employees from our corporate group accompany them every time to help them
enjoy the experience. Up to FY 2019, we have invited a total of 100 families, with
the total number of employees joining this program reaching 556.
We display posters with the message “For Your Safety and for Your Family’s Safety”
to encourage breast cancer patients to stay positive and not to be anxious or worry
about the disease all by themselves. We also distribute breast cancer inspection
handbooks through our stores to encourage self-inspection for the purpose of early
detection. In addition, to contribute to enhancing the quality of life of patients
worrying about the loss of their hair as a side effect of chemotherapy, since FY
2013, we have annually donated medical wigs to 100 breast cancer patients. Up
to FY 2019, we have donated medical wigs to approximately 700 patients.
Beauty advisers from our corporate group provide those staying at hospitals or nursing
facilities for a long time with make-up services to ensure “emotional communication”
with them through skin contact and conversation. This cosmetic therapy makes not only
the therapy receivers but also their families and other people taking care of them feel
cheerful and positive. From the launch in FY 2009 to FY 2019, we have offered the
therapy to a total of 3,404 people at 201 facilities.
We donate our original-design first-aid kits, consisting of adhesive and non-ad-
hesive bandages, gauze, clinical thermometers, and other items, mainly to the
local governments with which we have concluded comprehensive agreements.
We have so far donated a total of 880 sets to 10 cities, which distribute them to
nursery schools, kindergartens, children’s sports clubs and other facilities and
groups for children.
Annual number of AED donations
FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019
20 units 22 units 20 units 27 units 17 units 21 units 20 units
Development as a Regional Base That Supports the Safety and Security of All People
Promoting sports
We have a partnership contract with the local soccer club FC Kariya, so
that both of us can attract many more supporters by organizing soccer
training sessions for children and competitions and conducting health
checkups for spectators. In addition, we provide employment support
so that the team’s players can work at our stores, enabling them to
play an active role not only on the soccer field but also at our stores.
■■ Donating AEDs to facilities for senior citizensIn light of the lower installation rate of AEDs among facilities for senior citizens, we began to donate AEDs
to facilities for senior citizens in FY 2013. In FY 2019, we donated AEDs to 20 facilities for senior citizens
in the cities of Nisshin and Nagakute, Aichi Prefecture, making the total number of facilities to which we
have donated AEDs so far to 147 in 13 cities. After donating an AED, we always visit the facilities and
hold training sessions so that staff there can learn about how to use the equipment correctly.
■■ Installing AEDs at many more of our storesAlthough we have installed AEDs mainly at key stores in response to requests from the local community,
we are presently proceeding with installation of the equipment at stores located in communities with
many senior residents, stores visited by many customers, and stores situated in communities with which
we have concluded comprehensive agreements. By doing so, we are striving to reinforce our function as
a health station where medical care is available.
Promoting the Dementia Friend initiative to understand dementia correctly
We ensure that all stores of our corporate group have Dementia Friends to provide appropriate
services based on their accurate knowledge and understanding of dementia. Such staff mem-
bers have participated in a training program for Dementia Friends, enabling those with dementia
and their families to visit the stores without worry.
No. of Dementia Friends: 9,469 (as of February 2020)
Sustainability & Priority Issues 2
24 25Sugi Holdings Report 2020 Sugi Holdings Report 2020
SUGI Smile’s efforts
Provision of a Workplace Environment Where Employees Can Work Comfortably and Play Active Roles
Even in the age of digital innovation, we are confident that our excellent human resource development systems will
enable us to remain competitive. As indicated by our management philosophy, which highlights the “happiness of
each employee,” we have a long-established corporate culture in which our priority on employees is anchored. To
make this perpetual, we provide each employee with an environment and opportunities so that he/she can fully
demonstrate his/her capabilities, while supporting diversity in working styles that suit each individuals’ life stages.
Realization of diversity in working styles Employment support for senior citizens and the disabled
Certified as a Platinum Kurumin company
Providing support for employees according to their life stages
We are reinforcing our support for our human resources to continue their careers by, for example, introducing a local employment system, a working-hour option system and a teleworking system, and by providing information for employees on leaves of absence. These efforts enable our employ-ees to work depending on their life stages, such as parenting and elderly nursing, without restric-tions regarding time and place. In addition, we have many foreign employees, creating a working environment where both Japanese and foreigners can fully demonstrate their capabilities together.
For experts, such as pharmacists, beauty advisers and nationally certified dieticians, we provide an environment where female staff members can work for a long period of time even after having a baby, leading to a high ratio of women at our stores. Moreover, we encourage our employees to take leave and reduce their working hours so that they can take care of their elderly parents. We are improving in-house systems so that our employees can take care of their own lives and families with pride.
To contribute to further expansion of the employment of senior citizens, we ensure that flexible working styles are available so that
senior citizens can play an active role in society.
We also provide an environment and opportunities for the disabled to become independent by setting a wage for each disabled
worker depending on his/her capabilities and assigning him/her appropriate tasks. By expanding the area where the disabled are
employed as store staff from Chubu to Kanto, Kansai and Hokuriku, we will establish a corporate culture where staff can work
together whether they have disabilities or not.
Commending employees based on evaluations from both inside and outside the corporate group
We hold an award ceremony at the end of every year to commend excellent employees in recognition of their achievement of favorable results through fulfillment of the management philosophy. The awards are divided into Individual Awards (for managers and for non-managers) and Group Awards. In addition to the award ceremony, if a store receives comments of appre-ciation from customers on a daily basis and is highly praised by them, the store’s employees are also commended. In FY 2019, we granted the awards to more than 1,000 employees, including 100 winners of Individual Awards and staff members of 51 stores receiving Group Awards.
Providing optional, flexible workstyles
■■ Post-retirement re-employment systemOur post-retirement re-employment system allows employees to work until the age of 65. Those with certificates as, for example, pharmacists, and with experience as managers, foster the younger generation by using their skills and capabilities cultivated through their long-term careers. Meanwhile, those with the experience of working at stores continue to serve customers with kindness and sincerity.
■■ Silver Associates System (Senior Iki-iki Club)Under this system, we conclude business contracts with those aged 65 and over so that they can work at their own pace in the time slots they select, meaning that they can decide their working days and hours as they like. We launched this unprece-dented system in FY 2017. By providing contact points between society and senior citizens with spare time to work, we would like to contribute to enhancing their physical and mental health and extending their healthy lifespans.
Reinforcing HR development and facilitating the progress of employees through our career system
We are strengthening our efforts to foster a wide range of human resources, such as those working at our stores, those demonstrating their capabilities outside our corporate group, and those expected to serve in management in the future. We develop promising human resources by the establishment of a training system for fostering store managers and experts with high-level communication skills, intro-duction of a self-application system, rotating task assignments cross-sectionally, providing opportunities for training at outside organizations, and sending employees to partner companies to foster human resources who will underpin business development in new fields expected to grow in the future.
Nine in-house job coaches and 28 career counselors provide 316 employees with disabilities with opera-tional guidance and daily support. At our headquarters, these employees sort mail, do cleaning, and ship products to support logistics, while at stores, they do cleaning and arrange products onto shelves.
We are the first in the drugstore industry to be certified as a Platinum Kurumin business operator. The certification is granted to general employers that conform to the designated standards regarding parenting support. The percentage of our female workers who continue to work for a year or longer after taking parenting leave has reached 96%, much higher than the 90% required for Platinum Kurumin certification. In FY 2019, 455 employees (women: 444; and men: 11) took parenting leave, with the percentage of those returning to work after their leave reaching 94%.
With consideration given to the aging society with lower birthrates, we have introduced an HR system that enables employees to select their own working style depending on their life stage, such as parenting and elderly nursing, without restrictions on time and place. By establishing our own original standards, which exceed the statutory standards, we provide support for our employees to strike the best balance without worry between their careers and parenting/elderly nursing.
Our parenting-support systems exceeding the statutory standardsSystem DescriptionSpecial leave for spousal childbirth Two-day special leave (No statutory standards)
Parenting time Until the child turns three years old (Statutory standard: less than one year old)
Working-hour reduction for parenting
Until the child completes his/her elementary school program (Statutory standard: less than three years old)
Leave for child nursing
Seven days. For two or more children, 14 days of leave is avail-able. (Statutory standard: five days and 10 days, respectively)Until the child begins junior high school (Statutory standard: until the child begins elementary school)
Fixed working conditions for parenting
Working hours are fixed; days-off are fixed on Saturdays, Sundays and national holidays; it is also ensured that one-way commuting time is less than 60 minutes (No statutory standards)
Carry-over of annual leave Annual leave, which is available only within a designated period, can be carried over. (No statutory standards)
No. of male employees: 3,342
No. of female employees: 2,840
As of the end of February 2020
45.9%WomenMen
54.1%
No. of full-time employees
6,182
FY 2017 FY 2018 FY 2019
No. of disabled 261 288 316
Percentage of disabled of all employees 2.36% 2.41% 2.47%
No. of those registered (FY 2019) 985
Average age of those registered 70 (Maximum age: 84)
おお客客様様よよりり・・・・・・
先日毛受店店頭で湿疹用の軟膏を購入しました。その際にレジの方と薬剤師の方にとても丁寧に対応していただきました。また薬剤師の方にお勧めしてもらいました軟膏で、湿疹が改善しとても状況が良くなりました。当方の無知故にお時間を取らせてしまいましたが、説明も丁寧で症状に対して適切なものを勧めてもらえました。ありがとうございます。昨今何かとお忙しい状況ではありますが、その中でお時間を割いての接客ありがとうございました。
英ロゴ未
Sustainability & Priority Issues 3
26 27Sugi Holdings Report 2020 Sugi Holdings Report 2020
Efficient and Environmentally Friendly Use of Products and Resources by Eliminating Overdo, Waste and Unevenness
Enhancement of employees’ health A wide variety of efforts at our stores and headquarters
Efforts regarding mental health
Environmental efforts at our stores and headquarters
The first thing we need to do as a corporate group in proceeding with the Total
Healthcare Strategy is to enhance the health of our employees, who are the most
directly involved stakeholders. Accordingly, we are striving to achieve a smoking rate
of 0%, a health checkup rate of 100%, a specific health guidance rate of 100%, and
a breast and womb cancer screening rate of 100%.
We are taking environmental measures through the efforts of reduction,
reuse, and recycling (of waste) at our stores, headquarters and logistics
centers.
Efficient use of resources
We have established environmental stations at all our logistic centers to col-
lect unnecessary resources from our stores, sort them into the designated
categories, and hand them over to recycling plants and operators. While pro-
moting this recycling process, we also ensure that our stores collect medical
and pharmaceutical products whose expiry dates are imminent and use them
to, for example, train pharmacists.
In March 2007, we established the Mental Health Promotion Office for employees and launched various activities for the first time in the
drugstore industry. Today, we have also established Mental Health 110 as a counseling service to handle mental health problems in general,
thereby addressing various issues.
■■ Stress inspectionFor the prevention and early detection of mental health problems, we conduct an annual stress inspection. The inspection is available through each
employee’s smartphone so that they can easily identify their stress level.
■■ Mental Health 110We have a system enabling employees to seek counseling from outside corporate counselors via e-mail or by phone so that they can receive counseling
without worry at any time without any contact with the corporate group.
■■ Reduction in power consumptionAt our stores, headquarters and offices, we strive to reduce power consumption mainly through careful temperature control, air-conditioner cleaning on
a regular basis, and changing lighting-up hours. In addition, we have been introducing LEDs for lighting both inside and outside our stores over the past
few years, with our schedule for the replacement of conventional lighting with LEDs both inside and outside all our stores to be completed in FY 2020.
■■ Reuse of store equipmentWe ensure that freezers and other appliances of closed stores are reused in new
stores and renovated stores and are kept for replacement of damaged items.
■■ Reduction of plastic use We are striving to reduce plastic use by replacing our existing plastic bags with bags made from thin but hard-to-tear materials and by changing bag
sizes at appropriate timing. To prepare for the launch of the national system making the checkout bag fee mandatory from July 2020, we are now pushing
forward with a shift toward plastic bags containing biomass materials.
■■ Creation of a paperless environmentAt our corporate group, we are trying to go paperless in a wide variety of operations
to become even more environmentally-friendly and improve our operating efficiency.
Specifically, we are proceeding with digitization for placing orders with business
partners and requesting payment. In addition, we are also introducing online services
for membership registration and prize exchange, and also proceeding with digitiza-
tion for issuing payment slips to employees.
Provision of a Workplace Environment Where Employees Can Work Comfortably and Play Active Roles
Our corporate group is responsible for maintaining and enhancing the health of our employees and all other citizens. By reinforcing our
health and productivity management system, we make a pledge to proceed with the creation of a sound workplace environment where
each employee tries to maintain and enhance his/her health on a voluntary basis.
Health and productivity management declaration based on the management philosophy
FY 2017 FY 2018 FY 2019 FY 2020 (target)
FY 2022 (target)
Health checkup rate 92.7% 99.7% 98.6% 100% 100%
Breast cancer screening rate 77.5% 77.6% 78.9% 85.0% 100%
Womb cancer screening rat 57.6% 58.4% 60.0% 70.0% 100%
Specific health guidance rate 7.9% 88.4% * 100% 100%
Smoking rate 17.9% 17.0% 14.9% 13.2% 0%
FY 2022 health enhancement targets
Toward achieving our FY 2022 health enhancement targets, we
have set FY 2020 targets for reducing the entire corporate
group’s smoking rate to 13% and increasing the specific health
guidance rate to 100%. Moreover, in light of our high ratio of
female employees, we are striving this year to increase the
breast cancer screening rate and the womb cancer screening
rate to 85% and 70%, respectively. * Due to the spread of COVID-19, supervision that would have been provided in FY 2019 is scheduled to be given by around August 2020.
Recycle
Product shipment
Resource collection
Treatment for recycling
FY 2018 FY 2019
No. of used bags (unit: 1 million bags) 270 262
No. of used bags (unit: ton) 2,400 2,000
No. and weight of used checkout bags
Our corporate group was certified as a 2020 outstanding enterprise (in the large-enterprise division) in terms of health and productivity
management. We were selected as such jointly by the Ministry of Economy, Trade and Industry and Nippon Kenko Kaigi, in recognition of
our strategic efforts concerning health and productivity management, based on the stance of viewing the enhancement of employees’ health
as a management issue.
Certified as a 2020 outstanding enterprise in terms of health and productivity managemen
Sustainability & Priority Issues 3 Sustainability & Priority Issues 4
28 29Sugi Holdings Report 2020 Sugi Holdings Report 2020
Corporate Governance System
Basic Policy(1) Respect the rights of shareholders while securing their equal
treatment;
(2) Collaborate in an appropriate manner with stakeholders, taking into consideration the interests of stakeholders, including share-holders, customers, patients, business partners, local communities and employees;
(3) Secure transparency by appropriately disclosing corporate infor-mation; and
(4) Promote constructive dialogue with shareholders.
Chairperson of the board of directorsRepresentative Director & Chairman
No. of board members 7
No. of board members from outside 3
No. of outside directors appointed as independent directors
3
Board of auditors Established
No. of auditors 3
No. of outside auditors 3
No. of outside auditors appointed as independent directors
3
ChairpersonShigeyuki Kamino (outside director)
MemberHirokazu Sugiura (Representative Director & Chairman)Kana Yasuda (outside auditor)
Basic views on corporate governanceBy putting our management philosophy into practice and contributing
to local communities extensively, we would like to establish good
relationships with shareholders, customers, patients, business partners,
local communities, employees and other stakeholders, and realize our
growth and development as a corporate group that can draw support
from them.
To do so, we believe that excellent corporate governance is an
essential part of our foundation. To ensure legal compliance, make
appropriate and prompt decisions, execute operations efficiently, and
reinforce the auditing and supervision functions, we have a corporate
governance system and take the necessary measures based on the
following basic policy.
Corporate governance systemWe are a corporate group with auditors. Our board of directors, con-
sisting of seven directors (including three outside directors), makes all
necessary decisions in a timely manner. The execution of operations is
in accordance with the Regulations concerning Segregation of Duties
and the Internal Rules on Administrative Authorities regulations. The
board of directors receives reports at appropriate timing, and also
reviews these regulations as needed.
Our auditors attend the board of directors’ meetings and other
important meetings. They also conduct audits of the execution of
operations conducted by directors by means of inspecting important
documents, including minutes of various meetings and documents for
final approval, and report the results to the board of auditors.
For the execution of management decisions and operations of our
subsidiaries, directors and senior managers of our corporate group are
selected as board members of the subsidiaries, in a bid to ensure
appropriate corporate governance within the entire corporate group.
Board of auditorsFor a periodic audit conducted by the independent accounting auditor, our auditors and
the Audit Department hold meetings with the independent accounting auditor to pre-
pare the audit plan, report the results, and exchange opinions and information. For the
audit of each department by the Audit Department, our auditors have meetings with the
Audit Department to discuss the audit plan, report the results, and exchange opinions
and information.
We have appointed Deloitte Touche Tohmatsu LLC as our independent account-
ing auditor.
Board of Directors
Nomination and remuneration committeeOur nomination and remuneration committee consists of three members: two directors
(including one outside director) and one auditor (from outside). For directors, decisions
regarding their appointment and dismissal, the amounts of their remuneration, and the
calculation methods are made at board of directors’ meetings. Meanwhile, those for
auditors are made at board of auditors’ meetings. Both types of decisions are in line
with the deliberations of the nomination and remuneration committee.
Corporate governance system
The board of directors, consisting of seven directors (including three outside
directors), holds a regular meeting, in principle, on a monthly basis, and ad-hoc
meetings, if necessary, to make necessary decisions in a timely manner. The
execution of operations is in accordance with the Regulations concerning
Segregation of Duties and the Internal Rules on Administrative Authorities
regulations. The board of directors receives reports at appropriate timing, and
also reviews these regulations, as needed.
Name Position Appointment reason
Hirokazu SugiuraRepresentative Director & Chairman
We have judged that his strong leadership, decision-making capability, track record in business management, and extensive business knowledge are indispensable for further development and expansion of our corporate group, and thus continued to appoint him.
Eiichi SakakibaraRepresentative Director & President
We have judged that his profound insights and extensive experience in the drugstore industry and his leadership for improvement of sustainable corporate value will significantly contribute to further development and expansion of our corporate group, and thus continued to appoint him.
Katsunori SugiuraRepresentative Director & Senior Vice President
He aggressively implements various measures to realize the Total Healthcare Strategy with the aim of expanding business domains in this age of the super-aging society. We have judged that he will significantly contribute to further development and expansion of our corporate group, and thus continued to appoint him.
Shinya Sugiura Director
As Managing Director of Sugi Pharmacy Co., Ltd., he supervises the sales division, proactively hires medical office workers and improves training and education programs with the aim of increasing productivity in the prescription dispensing business. We have judged that his extensive knowledge and experience will significantly contribute to future development of the medical care business, the future core business of our corporate group, and thus appointed him.
Shigeyuki KaminoDirector (from outside)
He has made proactive remarks and recommendations during deliberations of the board of directors’ meetings. We have judged that his appropriate supervision and advice based on his profound insights and capabilities in terms of supervision of corporate management will greatly contribute to the improvement of corporate value of our corporate group, and thus appointed him.
Yoshiko HayamaDirector (from outside)
She has abundant experience and professional knowledge developed by serving as a certified public accountant and external director of listed companies. Due to her high levels of expertise in terms of business management and appropriate supervision and advice from the viewpoint of an independent officer, we have continued to appoint her.
Michiko HoriDirector (from outside)
She is involved in the corporate management of another company that provides medical information, while serving as a director at various institutions. We have judged that her profound medical insights, expertise and supervisory capability will significantly contribute to the improvement of corporate value of our corporate group, and thus appointed her.
General shareholders’ meeting
Independent accounting auditor
Nomination and remuneration committee
Two directors (incl. one member from outside)
One auditor (from outside)
Appointment/ dismissal
Appointment/ dismissal
Appointment/ dismissal
Appointment/ dismissal
ProposalProposal
Supervision
Report
Report
Audit
Cooperation
Report
ReportReport
Direction
Direction
Direction
Direction
Report
Cooperation
Cooperation
Representative director
Audit department
Board of directorsSeven directors
(incl. three members from outside)Three auditors (from outside)
Board of auditorsThree auditors (from outside)
Operating department
Risk committee
Corporate Governance
30 31Sugi Holdings Report 2020 Sugi Holdings Report 2020
Major Activities IR Activities
Major activities by our outside directors in FY 2019 (from March 2019 to February 2020)
No. of board of directors’ meetings (a total of 13 meetings) attended by our directors and auditorsFrom March 2019 to February 2020
No. of board of auditors’ meetings (a total of 14 meetings) attended by our auditorsFrom March 2019 to February 2020
Although we are a corporate group with auditors, our corporate governance incorporates a number of elements as a corporate group with a
nomination committee, as indicated mainly by the fact that we have three outside directors and three outside auditors, have set the term of
office of directors as a single year, and have established a nomination and remuneration committee at our own discretion. We understand
that entities with auditors, entities with a nominating committee and entities with an auditing committee all have their respective advantages,
but we judge that being an entity with auditors is appropriate for us at present.
Shigeo Asano resigned in May 2020 with the expiration of his one-year term of office as an outside auditor, and Makoto Kamiya has been
appointed as a new outside director.
IR activity and information disclosure policyWe believe that constructive dialogue with shareholders and investors
will lead us to increase our corporate value on a sustainable basis.
Striving to gain trust and empathy, we will continue to improve our
efforts for highly fair and transparent information disclosure and dia-
logue, and thereby promote shareholders and investors’ understanding
of our management activities.
Our management and administration departments are in charge of
general dialogue with shareholders and investors. Our representative
directors also attend face-to-face meetings, with consideration given
to requests from shareholders and investors and their dialogue topics.
Means of information disclosureFor important information covered by the Timely Disclosure
Regulations, we make disclosures through the Timely Disclosure
Network (TDnet), operated by the Tokyo Stock Exchange. At the same
time, we also release the information through our website and other
means as promptly as possible. For information that is not covered by
the regulations but is deemed useful for shareholders and investors
to deepen their understanding of our corporate group, we will try to
disseminate it through our website and other means. To ensure fair-
ness of information disclosure, we will release English versions of
timely-disclosure information and financial results briefing informa-
tion to the extent possible.
Moreover, we organize semiannual financial results briefings
and other meetings and answer daily inquiries from shareholders
and investors, with the aim of enhancing the quality of our
communication.
Quiet periodTo prevent leakage of financial results information and ensuring the
fairness of information disclosure, we designate the period from the
following day of the end of each fiscal year to the announcement date
of the financial results as a “quiet period,” during which we refrain
from presenting any comments on the financial results and answering
questions regarding them.
Dialogue with shareholders and investors (FY 2019)
Financial results briefings for institutional investors and analysts (first-half and full-year meetings)
2 briefings
Small meetings on our financial results for institutional investors and analysts
14 meetings
Conference organized by a securities company 1 conference
Individual meetings for institutional investors (face-to-face/phone)
125 meetings
Hirokazu Sugiura
Eiichi Sakakibara
Katsunori Sugiura
Shinya Sugiura
Shigeyuki Kamino
Yoshiko Hayama
Hiroshi Matsumura*
Toshihiko Sakamoto
Shigeo Asano
Kana Yasuda
13 meetings
13 meetings
13 meetings
13 meetings
13 meetings
13 meetings
5 meetings
13 meetings
13 meetings
13 meetings
* Assumed the position in May 2019 (and passed away in November 2019)
Toshihiko Sakamoto
Shigeo Asano
Kana Yasuda
14 meetings
14 meetings
14 meetings
Name Category Description
Shigeyuki Kamino DirectorHe made remarks regarding the execution of operations in general by taking advantage of his experience as a representative director of a company in the logistics industry and a director of an industrial society.
Yoshiko Hayama DirectorShe made necessary remarks in a timely manner from a professional viewpoint in the field of accounting based on her experience and insight mainly as a certified public accountant.
Hiroshi Matsumura Director
Of the seven board of directors’ meetings held between the beginning of this fiscal year and November 11, 2019, when he passed away and was deemed to have resigned, he attended five meetings. He made neces-sary remarks in a timely manner based on his experience as a representative director of another company in the field of medical care and nursing industry and from a professional perspective.
Toshihiko Sakamoto Full-time auditorHe made remarks regarding the execution of operations in general based on his experience as a represen-tative director of another company.
Shigeo Asano AuditorHe made remarks regarding the execution of operations in general based on his experience as a represen-tative director and an auditor of other companies.
Kana Yasuda AuditorShe made necessary remarks in a timely manner from a professional perspective in the field of accounting and taxation based on her insight by taking advantage of her experience mainly as a certified public accoun-tant and a licensed tax accountant.
BCP (in Case of Disasters and Other Emergencies)
To prepare for contingencies that might gravely affect our corporate group, such as large-scale disasters and pandemics, we have prepared a
disaster manual and established a business contingency plan (BCP). In addition, we conduct a disaster drill and biannual drills through our
safety confirmation system among all employees at the headquarters, offices, and stores.
FY 2019 Major Efforts
1
2
3
4
Identified risk factors of large-scale disasters based on the lessons learned through past disasters, had our stores checked by authorized first-class architects, and conducted seismic reinforcement as needed
Revised our store operation manual to prepare for earthquakes, storms, and flooding, distributed the revised version to our stores, and conducted training programs and drills
Distributed the Compliance and Disaster Countermeasure Pocket Book to all our employees, to be carried by them
Established a taskforce against COVID-19, took measures against the virus at our stores, head-quarters, and offices (by formulating regulations regarding cleaning, disinfection, ventilation, etc.), and decided how to respond to possible infections in our corporate group Compliance and Disaster
Countermeasure Pocket Book
Cooperation with local governments in case of disastersWe are proceeding with the conclusion of agreements with local governments to ensure necessary materials and support provisions in case of
disasters. As of February 2020, we have concluded disaster agreements with 27 municipalities and 2 organizations.
Corporate Governance
32 33Sugi Holdings Report 2020 Sugi Holdings Report 2020
Risk Management
� We have security rooms and security cameras at the headquarters and each office.� We strive to increase our in-house security by distributing security cards to employees and granting them the necessary authority depending on their roles. In addition, we focus on training employees, as needed, for example by calling attention to the inadvisability of posting improper messages on social media.
Take-out and loss of data
Reinforcing the prohibition on the connection of in-house PCs
to external equipment
Misdirection of e-mail
� Establishing an investigation system in case of information leakage
� Ensuring evidence for follow-up
Unauthorized access from outside
� Installing a firewall� Preventing virus mail from being
received
Reported cases of compliance issues (FY 2019):
358 cases
Total no. of reported cases
358
Counseling on working practices and hours1.1%
Counseling on possible wrongdoing and violation
of regulations3.1%
Others (trouble,
dissatisfaction, etc.)
88.8%
Counseling on behaviors/actions and harassment7.0%
Legal Compliance
We strive to be trusted and respected by employees, customers,
shareholders, business partners and local residents not only by, need-
less to say, ensuring legal compliance, but also by following social
norms and acting and judging based on high ethical standards. To
realize our management philosophy, we will continue to ensure full
legal compliance.
Inner reporting systemFor early detection and correction of violation of compliance codes,
such as in-house regulations and laws, we have established
Compliance 110, our corporate group’s compliance counseling system,
enabling employees to seek counseling anonymously.
To increase the profile and understanding of the above-mentioned
system, we have ensured that contact information for the system is
displayed at our stores and offices, and have also distributed the
Compliance and Disaster Countermeasure Pocket Book. By doing so,
we are striving to establish a sound reporting system.
Legal compliance programsAt our corporate group, we organize legal compliance programs every
year for all employees in order to enhance their knowledge and aware-
ness of legal compliance.
These are group programs categorized into the following: one for
all employees centered on case studies using a video made in-house;
one for employees fresh from school and mid-career employees to take
when they join our corporate group; and one for newly-appointed
store directors and office managers to take depending on their posi-
tion. In FY 2019, the program for all employees was themed based on
Information Security and Wrongdoing. While reviewing the content in
light of changes in risk factors, we are continuing the programs so that
they will lead us to improve our operations.
Compliance handbookTo ensure full legal compliance, we have
distributed the Compliance and Disaster
Countermeasure Pocket Book, which con-
tains individual, specific case studies to
present action guidelines to follow in the
course of daily operations. The directors and
employees of our corporate group are
required to act according to the handbook.
If they feel any doubt from the perspective of legal compliance when
conducting their daily operations, they are required to respond in
accordance with the handbook.
Our corporate group has a risk committee to correctly identify a wide variety of risk factors that are expanding and diversifying in step with
the growth of our corporate scale and to take measures in advance, thereby averting possible crises.
Risk committeeOur risk committee consists of the Representative Director & President,
directors, a full-time auditor, and a director from one of our subsidiar-
ies (Sugi Pharmacy Co., Ltd.). The committee has at least one meeting
every six months on a regular basis, plus ad-hoc meetings as needed,
in order to discuss issues regarding corporate group-wide risk manage-
ment and decide measures to address them. In FY 2019, the commit-
tee held a total of 21 meetings.
Chairperson Eiichi Sakakibara (Representative Director & President)
Members
Katsunori Sugiura (Representative Director & Senior Vice President), Shinya Sugiura (Director), Toshihiko Sakamoto (Full-time Auditor), and a director from one of our subsidiaries (Sugi Pharmacy Co., Ltd.)
Secretariat office
Legal Affairs Department of SUGI Holdings and General Affairs Department of SUGI Pharmacy
Information Security Basic Policy
One of the tenets of our management philosophy is contributing to
local communities. Our employees always strive to be trusted by both
customers and business partners by serving customers with kindness
and responding to business partners with honesty.
To protect information regarding customers and business partners
and live up to their trust is a social responsibility placed on our corpo-
rate group as a corporate citizen.
We have an information security basic policy, based on which we
properly and safely treat our information assets and strive to ensure
our business continuity.
Treat our information assets properly;
Clarify who is responsible for the management of important infor-mation assets, and ensure that the management of the informa-tion assets is effective;
Provide employees with training programs regarding information assets on a regular basis, demand that they act in accordance with this basic policy and related regulations, and ensure that they clearly take responsibility in case of violation:
Ensure compliance with laws and regulations regarding the treat-ment of information assets; and
Conduct assessments on the environment surrounding informa-tion assets and inspections on the treatment of information assets on a regular basis, and thereby strive to improve the management of information assets.
1
2
3
4
5
Risk factors to be managed
Category Examples of the major risk factors to our corporate group
Business strategy risk factors
Response to changes in the market and competitive environment, inappropriate/improper information disclosure (IR/PR)
Operation risk factorsMistakes in prescription dispensing, product quality management (defective PB products), violation of the Act against Unjustifiable Premiums and Misleading Representations and the Subcontract Act, excessive inventory, impact of climate change, disasters, etc., and epidemics of new-type infectious diseases
Administration system risk factors
Wrongdoing by directors and senior managers, management of group companies, information management (leakage of personal/classified infor-mation), cyber-terrorism, information attacks through inappropriate use of social media and other means, violation of the Labor Standards Law, harassment, violation of laws and regulations, and insider deals
* We have appointed directors as managers of the risk factors in the respective categories in the list above.
Corporate Governance
34 35Sugi Holdings Report 2020 Sugi Holdings Report 2020
(Unit: 1 million yen)
Previous consolidated fiscal year(Feb. 28, 2019)
Present consolidated fiscal year(Feb. 29, 2020)
Assets
Current assets
Cash and cash equivalents 65,311 81,347
Accounts receivable 19,797 28,211
Securities 13,000 10,000
Inventory 59,674 63,668
Others 11,580 13,669
Allowance for doubtful accounts (15) (13)
Total current assets 169,348 196,883
Fixed assets
Tangible fixed assets
Buildings and structures 76,544 88,705
Accumulated depreciation (32,816) (36,711)
Buildings and structures (net) 43,728 51,994
Land 7,248 7,858
Construction in progress 2,359 4,822
Others 27,013 31,346
Accumulated depreciation (18,648) (21,745)
Others (net) 8,365 9,601
Total tangible fixed assets 61,702 74,276
Intangible fixed assets 2,998 3,542
Investments and others
Investment securities 1,247 3,342
Long-term loans receivable 4 4
Deferred tax assets 7,267 8,603
Guarantee deposits 19,829 22,861
Others 3,119 4,265
Allowance for doubtful accounts (36) (23)
Total investments and others 31,431 39,054
Total fixed assets 96,132 116,874
Total assets 265,481 313,757
(Unit: 1 million yen)
Previous consolidated fiscal year(Feb. 28, 2019)
Present consolidated fiscal year(Feb. 29, 2020)
Liabilities
Current liabilities
Accounts payable — trade 58,241 82,479
Income taxes payable 4,223 5,220
Provision for bonuses 1,339 1,955
Others 21,606 26,123
Total current liabilities 85,410 115,779
Fixed liabilities
Retirement benefit liability 5,692 6,379
Asset retirement obligations 4,960 5,517
Others 2,854 3,330
Total fixed liabilities 13,507 15,228
Total liabilities 98,918 131,007
Net assets
Shareholders’ equity
Capital stock 15,434 15,434
Capital surplus 24,632 24,632
Retained earnings 135,661 151,807
Treasury stock (9,296) (9,297)
Total shareholders’ equity 166,431 182,577
Accumulated other comprehensive income
Valuation difference on available-for-sale securities 251 317
Remeasurements of defined benefit plans (119) (144)
Total accumulated other comprehensive income 131 172
Total net assets 166,563 182,750
Total liabilities and net assets 265,481 313,757
Consolidated Balance Sheet
Data Section
36 37Sugi Holdings Report 2020 Sugi Holdings Report 2020
Consolidated Statement of Income and Consolidated Statement of Comprehensive Income
Consolidated Statement of Cash Flows
Consolidated Statement of Income(Unit: 1 million yen)
Previous consolidated fiscal year
(From Mar. 1, 2018 to Feb. 28, 2019)
Present consolidated fiscal year
(From Mar. 1, 2018 to Feb. 29, 2019)
Net sales 488,464 541,964Cost of sales 346,164 379,782Gross profit 142,300 162,182Selling, general and administrative expenses
Salaries, allowances and bonuses 48,949 54,708Provision for bonuses 1,324 1,934Retirement benefit expenses 1,151 1,131Rent expenses 21,872 25,926Others 43,185 48,718Total selling, general and administrative expenses 116,483 132,420
Operating income 25,817 29,762Non-operating income
Interest income 101 93Dividend income 95 6Gain on donation of non-current assets 523 595Rental income 1,568 1,660Commission income 363 566Others 398 381Total non-operating income 3,050 3,304
Non-operating expensesCommission income 25 22Rental costs 1,061 1,142Loss on retirement of non-current assets 213 249Others 329 178Total non-operating expenses 1,630 1,592
Ordinary income 27,237 31,473Extraordinary losses
Impairment loss 1,184 1,546Total extraordinary losses 1,184 1,546
Profit before income taxes 26,053 29,926Income taxes — current 8,789 10,496Income taxes — deferred (675) (1,352)Total income taxes 8,113 9,144Net income 17,940 20,782Profit attributable to owners of parent 17,940 20,782
Consolidated Statement of Comprehensive Income(Unit: 1 million yen)
Previous consolidated fiscal year
(From Mar. 1, 2018 to Feb. 28, 2019)
Present consolidated fiscal year
(From Mar. 1, 2018 to Feb. 29, 2019)
Profit 17,940 20,782Other comprehensive income
Valuation difference on available-for-sale securities 137 66Remeasurements of defined benefit plans 69 (25)Total other comprehensive income 207 41
Comprehensive income 18,147 20,823(Comprehensive income attributable to)
Comprehensive income attributable to owners of parent 18,147 20,823
(Unit: 1 million yen)
Previous consolidated fiscal year
(From Mar. 1, 2018 to Feb. 28, 2019)
Present consolidated fiscal year
(From Mar. 1, 2018 to Feb. 29, 2019)
Cash flows from operating activities
Profit before income taxes 26,053 29,926
Depreciation 7,389 8,412
Impairment loss 1,184 1,546
Increase (decrease) in reserve for price fluctuation (32) 610
Increase (decrease) in retirement benefit liability 653 646
Increase (decrease) in allowance for doubtful accounts (7) (14)
Interest and dividend income (197) (100)
Gain on donation of non-current assets (271) (397)
Interest expenses 25 22
Loss on retirement of non-current assets 11 45
Decrease (increase) in trade receivables (2,539) (8,391)
Decrease (increase) in inventories (7,074) (4,099)
Increase (decrease) in trade payables 7,087 24,225
Others (197) 2,417
Sub-total 32,085 54,851
Interest and dividends received 161 29
Interest paid (25) (18)
Income taxes paid (9,326) (9,508)
Net cash provided by (used in) operating activities 22,894 45,353
Cash flows from investing activities
Payments into time deposits (72,000) (62,000)
Proceeds from withdrawal of time deposits 71,000 66,000
Purchase of securities (51,000) (37,000)
Proceeds from redemption of securities 52,000 42,000
Purchase of property, plant and equipment (17,141) (19,389)
Purchase of intangible assets (937) (998)
Purchase of investment securities (359) (2,011)
Purchase of shares of subsidiaries and associates (461) –
Collection of loans receivable 3 1
Payments of guarantee deposits (3,364) (4,659)
Proceeds from refund of guarantee deposits 126 488
Others (227) (853)
Cash flows from investing activities (22,362) (18,422)
Cash flow from financial activities
Purchase of treasury shares (9,248) (0)
Repayments of finance lease obligations (268) (244)
Dividends paid (4,379) (4,634)
Others (0) (15)
Cash flow from financial activities (13,897) (4,895)
Net increase (decrease) in cash and cash equivalents (13,365) 22,035
Cash and cash equivalents at beginning of period 47,676 34,311
Cash and cash equivalents at end of period 34,311 56,347
Data Section
38 39Sugi Holdings Report 2020 Sugi Holdings Report 2020
(Unit: 1 million yen)
FY ended in February 2016 2017 2018 2019 2020
Net sales 414,885 430,795 457,047 488,464 541,964
Operating income 23,112 22,832 24,760 25,817 29,762
Ordinary income 23,810 23,875 25,900 27,237 31,473
Profit attributable to owners of parent 14,605 14,947 16,411 17,940 20,783
Equipment investment*1 10,258 11,888 11,653 18,079 20,387
Depreciation 5,267 5,599 6,436 7,389 8,412
Cash flows from operating activities 13,248 16,912 27,564 22,894 45,353
Cash flows from investing activities (9,043) (18,439) (17,911) (22,362) (18,422)
Cash flows from financial activities (2,505) (3,506) (3,401) (13,897) (4,895)
Cash and cash equivalents 46,458 41,425 47,676 34,311 56,347
End of consolidated fiscal year
Net assets 136,782 148,782 162,046 166,563 182,750
Total assets 217,936 230,664 253,989 265,481 313,757
Information per share:
Net income (unit: yen) 230.67 236.08 259.21 287.74 336.21
Net asset (unit: yen) 2,160.36 2,349.90 2,559.40 2,694.59 2,956.46
Dividend (unit: yen) 45.00 50.00 60.00 70.00 80.00
Management indexes:
Equity ratio (unit: %) 62.8 64.5 63.8 62.7 58.2
Return on equity (ROE) (unit: %) 11.2 10.5 10.6 10.9 11.9
Return on total assets (ROA) (unit: %) 11.1 10.6 10.7 10.5 10.9
Payout ratio (unit: %) 19.5 21.2 23.1 24.3 23.8
Annual sales growth rate:
All stores — entire corporate group (unit: %) +8.3 +3.8 +6.0 +6.9 +11.0
All stores — SUGI Pharmacy operations (unit: %)*2 +9.4 +5.8 +8.3 +9.9 +13.8
Existing stores — entire corporate group (unit: %) +5.7 +0.6 +2.3 +2.2 +5.1
Existing stores — SUGI Pharmacy operations (unit: %)*2 +6.3 +1.1 +2.7 +2.6 +5.9
Prescription dispensing information:
Sales from prescription dispensing 69,667 75,484 84,108 91,074 105,279
No. of prescriptions filled by us (unit: sheet) 6,181,431 6,982,700 7,704,463 8,698,045 9,833,178
Prescription cost (unit: yen) 11,270 10,810 10,917 10,471 10,707
Non-financial indexes:
No. of stores (store) 996 1,048 1,105 1,190 1,287
No. of new stores (store) 70 75 80 102 116
No. of M&A transactions (store) 0 0 0 0 1
Year-end sales area (SUGI Pharmacy) (unit: m2) 480,282 517,103 578,304 641,253 703,391
Year-end sales area (Japan) (unit: m2) 107,304 107,397 89,538 81,064 77,912
No. of full-time employees (unit: person) 4,474 4,927 5,263 5,494 6,182
No. of partner employees (converted into the number of 8-hour workers) (unit: person)
6,700 7,722 7,973 8,758 10,282
No. of SUGI Pharmacy card members (unit: 10 thousand persons)
– – – 1,515 1,645
No. of SUGI Pharmacy app downloads (unit: 10 thousand downloads)*3
– – – 178 350
No. of SUGIsapo app downloads (unit: 10 thousand downloads)*4
– – – – 61
*1: “Equipment investment” contains expenses system investment and store renovation expenses.*2: “SUGI Pharmacy operations” presents only the number of stores of SUGI Pharmacy.*3: This is the number since the revamp of the app (in October 2018).*4: This is the total number of downloads of the Walk app and the Eats app.
Trade name: SUGI Holdings Co., Ltd.
Established: March 8, 1982
Capital: 15,434,588,000
No. of employees: 6,182 (on a consolidated basis)
Major operations: Control and management of companies operating in such fields as prescription dispensing, drugstores, and home-visit nursing stations
Headquarters: 62-1 Shin’e, Yokone-machi, Obu-shi, Aichi, 474-0011
Main store: 1-8-4 Mikawa Anjo-cho, Anjo-shi, Aichi, 446-0056
No. of stores: 1,287 (in the entire corporate group)• SUGI Pharmacy: 1,163• Japan: 113• SUGI home-visit nursing stations: 11
Directors(as of May 20, 2020)
Representative Director & Chairman: Hirokazu Sugiura
Representative Director & President: Eiichi Sakakibara
Representative Director & Senior Vice President: Katsunori Sugiura
Director: Shinya Sugiura
Outside director: Shigeyuki Kamino
Outside director: Yoshiko Hayama
Outside director: Michiko Hori
Outside full-time auditor: Toshihiko Sakamoto
Outside auditor: Kana Yasuda
Outside auditor: Makoto Kamiya
Total number of shares authorized to be issued by the Company: 200,000,000
Total number of issued shares: 63,330,838
No. of shareholders: 30,212
Share Price Chart
Share distribution according to shareholders
Major shareholders (top 10)
Name
Number of shares
held (unit: thousand)
Ratio of share-
holding (unit: %)
Sugi Shoji Co., Ltd. 20,605 33.33
The Master Trust Bank of Japan, Ltd. (trust account) 2,357 3.81
Katsunori Sugiura 1,892 3.06
Shinya Sugiura 1,892 3.06
THE BANK OF NEW YORK MELLON 140051 1,346 2.17
THE BANK OF NEW YORK MELLON 140042 1,299 2.10
Tsuruha Co., Ltd. 1,272 2.05
THE BANK OF NEW YORK MELLON 140044 1,187 1.92
STATE STREET LONDON CARE OF STATE STREET BANK AND TRUST, BOSTON SSBTC A/C UK LONDON BRANCH CLIENTS — UNITED KINGDOM 1,163 1.88
Japan Trustee Services Bank, Ltd. (trust account) 1,153 1.86
(Notes) 1. We possess 1,516,887 treasury shares, but exclude ourselves from the above list of the main shareholders.
2. The shareholding ratio is calculated after excluding our treasury shares.
Major Financial and Non-financial Indexes for the Past Five Years Corporate Profile Stock Information
Financial institutions: 12.10%
Financial instrument business operators: 2.24%
Other domestic corporations: 35.19%
Foreigners: 32.20%
Individuals and others: 15.87%
Treasury shares: 2.40%
9,0008,0007,0006,0005,0004,0003,000
4,0005,0006,0007,000
2,000
2,0001,000
3,000
03 1 2
2015 20164 5 6 7 8 9 10 11 12 3 1 24 5 6 7 8 9 10 11 12 3 1 24 5 6 7 8 9 10 11 12 3 1 24 5 6 7 8 9 10 11 12 3 1 24 5 6 7 8 9 10 11 12
2017 2018 2019 2020
出来高(千株)
株価(円)Share price (unit: yen)
Volume (unit: thousand shares)
Corporate Profile and Stock Information(as of February 29, 2020)
Data Section
40 41Sugi Holdings Report 2020 Sugi Holdings Report 2020